Saturday, January 01, 2022
Dispute over 12 euro plans
Minimum wage rises, but how far still?
At the beginning of the new year, the statutory minimum wage in Germany will also rise – to 9.82 euros an hour. From the point of view of some, this is still not enough – the traffic light coalition, for example, has set its sights on 12 euros. Employee representatives are urging them to hurry, but employers are threatening to take legal action.
The statutory minimum wage in Germany will rise to 9.82 euros per hour on January 1st. Before that it was 9.60 euros. On July 1, 2022 there will be a further increase to 10.45 euros. These increases follow the requirements of the minimum wage commission, which is made up of representatives from employers and trade unions. Because of the higher lower wage limit and the increasing demand for skilled workers, according to a company survey by the Ifo Institute, employees can expect significant wage increases overall in the new year.
With regard to the minimum wage, Federal Labor Minister Hubertus Heil wants to present a law at the beginning of the year to increase it to 12 euros this year. With this, Heil wants to implement a promise made by the traffic light coalition. However, there is still a dispute about the step to a minimum wage of 12 euros. At the turn of the year, DGB board member Stefan Körzell demanded: “The coalition must get the 12 euros off the ground quickly in 2022, because in the usual procedure of the minimum wage commission we would only get this amount at the end of the decade.”
Germany’s employers, on the other hand, have announced that they want to examine a lawsuit against a statutory increase in the minimum wage. Craftsman Hans Peter Wollseifer had said that 12 euros would make numerous collective agreements obsolete as early as 2022. The only way out of this dilemma is to set a target of 12 euros – “but not for the year 2022”.
“Gross violation of collective bargaining autonomy”
Employer President Rainer Dulger had criticized the government’s 12 euro plans as a “gross violation of collective bargaining autonomy”. “Whether, when and how we have the Federal Government’s actions legally checked in a qualified manner depends entirely on when this political minimum wage is to be implemented,” said Dulger. “The autonomy of collective bargaining is constitutionally protected.”
A minimum wage of 12 euros was a key election campaign promise made by the current Chancellor, Olaf Scholz of the SPD. There has been a general statutory lower wage limit in Germany since 2015. It was introduced at a level of EUR 8.50. The unions argue that this was already too low at the time and that a one-off increase is therefore advisable by law. The minimum wage commission decides on the regular increase steps on the basis of the previous tariff development, which is determined by the Federal Statistical Office in the tariff index.
Körzell said: “A poverty-proof minimum wage is overdue.” For this purpose, 60 percent of the median income with full employment is taken as the benchmark. According to Körzell, this is achieved in Germany with “at least 12 euros”. “At least 8.5 million people, mostly women, would benefit,” he said. In general, many employees can expect significant wage increases in 2022. According to a company survey by the Ifo Institute, 78 percent of the 630 HR managers questioned assume “that overall wages in their workforce will rise by an average of 4.7 percent”. In the service sector, the wage increase is likely to be the highest with an average of 5.8 percent, according to the study.